Anavex Life Sciences Corp. — Q3 FY2022 Form 10-Q
Reporting period: Three and nine months ended June 30, 2022; fiscal year ends September 30. The interim financial statements are unaudited. Anavex is a clinical-stage biopharmaceutical company developing CNS therapies, with no operating revenue to date.
Financial performance and liquidity
| Metric | Three months ended June 30, 2022 | Prior-year quarter | Nine months ended June 30, 2022 | Prior-year period |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Operating expenses | $12.5 million | $11.4 million | $35.7 million | $29.7 million |
| Net loss | $12.4 million | $10.2 million | $33.7 million | $26.2 million |
| Loss per share, basic and diluted | $0.16 | $0.14 | $0.44 | $0.39 |
- Third-quarter R&D expense was $9.3 million, compared with $9.0 million; nine-month R&D was $26.5 million, versus $23.6 million. G&A was $3.2 million and $9.2 million, respectively, compared with $2.4 million and $6.1 million.
- Net other income was $0.2 million for the quarter and $2.2 million for the nine months, down from $1.3 million and $3.7 million. The filing cites lower Australian R&D incentive income and foreign-exchange effects.
- Cash and cash equivalents were $153.2 million at June 30, 2022, versus $152.1 million at September 30, 2021. Working capital was $150.7 million, approximately unchanged from $150.8 million.
- Nine-month operating cash use was $20.2 million, compared with $22.7 million. Financing provided $21.3 million, principally from common-stock sales under the at-the-market (ATM) agreement; cash increased $1.1 million.
- Total liabilities were $9.5 million, comprising current payables, accruals and deferred grant income. The filing reports no debt balance. No operating margins are meaningful because the company had no revenue.
Material changes and financing
- Operating expenses rose 9% in the quarter and 20% for the nine-month period. Management attributed much of the increase to higher non-cash stock-based compensation, an expanding team, insurance and intellectual-property costs. Nine-month R&D clinical-trial costs were partly lower as certain enrollment and manufacturing activities concluded.
- Stock-based compensation was $12.3 million for the nine months, up from $5.1 million. The company estimated approximately $24.3 million would be recognized over the remaining terms of options through fiscal 2025.
- Under the ATM, Anavex sold 1.62 million shares during the nine months for $21.0 million gross and $20.3 million net proceeds. At June 30, approximately $142.4 million remained registered and available under the agreement. Common shares outstanding were 77.9 million at June 30.
- Financing cash inflows were substantially below the prior-year period’s $151.0 million, which included larger equity offerings. The company expects continued operating cash outflows.
Outlook, programs and risks
- Management said existing working capital should meet requirements for more than 12 months after issuance of the statements. It plans to use capital to advance ANAVEX 2-73 and ANAVEX 3-71 programs. Management can adjust spending based on clinical-trial timing; additional financing may be needed, and failure to obtain it could delay or reduce R&D.
- The last patient visit in the 509-patient Alzheimer’s Phase 2b/3 study was completed at the end of June 2022. The company expected to announce topline results in the second half of 2022. The filing also reports continued work on the pediatric Rett syndrome EXCELLENCE trial and open-label extensions.
- The company reported that its Rett syndrome AVATAR study met stated primary and secondary endpoints, and described positive results from its Parkinson’s disease dementia study. These are company-reported clinical findings, not regulatory approvals or established commercial outcomes.
- Key risks include uncertain trial efficacy and safety, regulatory approval, timing and cost of development, reliance on third parties, ability to raise capital, and intellectual-property protection. Anavex cautioned that preclinical activity may not translate to human results. It reported no material change to previously disclosed risk factors, no material pending litigation, and no material off-balance-sheet arrangements.
Investor verification priorities
- Verify subsequent Alzheimer’s Phase 2b/3 topline results, complete data, and any regulatory feedback.
- Track clinical milestones, enrollment and results for EXCELLENCE and other ongoing or planned programs.
- Assess cash burn, the company’s stated greater-than-12-month liquidity horizon, and future financing needs.
- Monitor ATM share sales, remaining capacity, stock-based compensation and resulting dilution.
- Review whether reported trial findings are confirmed in full datasets and supported by regulators; development-stage results remain uncertain.